I'd be surprised to see a firmware update allowing this feature. iRiver is a business, after all, and why sell a 20GB PVP for $299 when they can get $399 or more for such a unit? Not that I wouldn't love to watch videos on my 320.

The USB feature cut seems to have been the direct camera transfer. Rumors of a firmware fix are in existance, whether they're truthful is unknown to me.

I was in almost exactly the same situation, although I was also considering a 20GB iPod. I really like the Zen Micro myself, but the extra 15 gigs of space was too much to pass up for only a bit more. The iRiver has more space, more features, and a really nice screen. The Zen has a very straightforward, streamlined, interface, is small, and has good battery life. It really depends on whether you want to sacrifice size for space.